Does Returnee Entrepreneurship Promote Innovation in Returnee Firms in Emerging Markets? A Knowledge Management Perspective

The paper brings a knowledge management perspective to examine the conditions under which returnee entrepreneurship will promote innovation in emerging markets. Returnee entrepreneur firms are regarded as a positive force for promoting innovation capabilities in developing countries. The existing literature has focused on the knowledge spillover that such firms bring to the local firms with the assumption that such firms are more innovative than local firms. But not all firms established by returnee entrepreneurs can achieve superior innovation performance. In this paper, we argue that whether returnee entrepreneur firms can achieve superior innovation performance is likely contingent upon the external knowledge spillover effect between returnee firms as well as their internal firm-specific knowledge management capability. Moreover, we propose the extent of the spillover effect is positively moderated by returnee firms' knowledge management capabilities. Results from an empirical study of returnee firms in China's returnee entrepreneur parks largely support our hypotheses.